By repeating “ch-ch-ch-ch-changes” in his famous song, David Bowie was reportedly trying to mirror the stuttered steps of growth. January 2025 was a month full of changes for the UK Competition and Markets Authority (CMA). As with any changes, it is difficult to predict their effect precisely, only time will tell. Although we do not have a crystal ball, however, our longstanding and in-depth experience in UK competition law gives us unique insights on what to expect and most importantly how to adapt. In this update, we will cover some of these key changes including:

• The entry into force of the Digital Markets, Competition and Consumers Act (DMCCA) and related updated guidance.
• An anticipated reform of the UK concurrency regime to extend to consumer protection.
• The exercise by the CMA of its new DMCCA powers to designate companies with Strategic Market Status (SMS).
• Last but not least, perhaps the changes that grabbed the headlines the most: the CMA has a new interim Chairperson and the UK government’s “steer” to the CMA’s CEO.

The underlying theme of all these changes is a drive towards growth… In the CMA’s own words, the “new regime provides a unique opportunity to encourage the benefits of investment and innovation from the largest digital firms, while ensuring a level playing-field for the many start-ups and scale-ups across the UK tech sector.” Hopefully, not a stuttered growth, only time will tell.

DMCCA and New Guidance

With the entry into force of the DMCCA on 1 January 2025, the CMA published updated guidance on its merger control and antitrust procedures. We have previously written our summary of the DMCCA and the main changes introduced to the updated CMA guidance, compared to the previous guidance, to reflect the DMCCA is available is available in this rider.

Concurrency Regime

The CMA also published a report entitled a ‘review of the competition concurrency arrangements’ which sets outs its findings and recommendations following its consultation seeking opinions on the effectiveness of the current competition concurrency arrangements. These arrangements have so far referred to the concurrent powers of the CMA and various sector regulators to apply UK competition law in their respective sectors – e.g. the CMA and Ofcom in the electronic communications sector. With the DMCCA, the concurrency arrangements now extend also to consumer protection law. Therefore, the CMA’s report recommends that: “In light of the reforms in the DMCC Act [DMCCA], we think there is merit in a more in-depth review of the effectiveness of existing consumer concurrency arrangements, and how the CMA works with the sector regulators to fulfil their consumer protection roles in the regulated sectors.”

SMS Designations

The CMA has already launched three investigations under the DMCCA for new SMS designations:

• The first will consider whether Google has SMS in the provision of search and search advertising services.
• The second and third will consider whether Google and Apple have SMS in their respective ‘mobile ecosystems’ which include app stores, the operating systems and browsers that operate on mobile devices.

The CMA’s CEO said the probes will have a “significant impact” not just on companies selected for designation but “also the stakeholders,” and therefore it is necessary to have a “lot of engagement.” Moreover, the CMA has also provisionally found in the on-going cloud services market investigation that it intends to recommend to the CMA board to designate Amazon Web Services (AWS) and Microsoft with SMS in the provision of cloud services.

New CMA Chairperson

After an unsatisfactory meeting in Downing Street, with the UK government citing a fundamental ‘difference of approach’ in how best to drive growth and investment, the then chair of the CMA, Marcus Bokkerink, resigned and Doug Gurr – a former head of Amazon UK and Amazon China – was appointed as Interim Chair, sparking controversy. In a letter to the Financial Times, Doug Gurr confirmed an immediate review of the CMA’s work, so as to ensure that it makes “[g]ood decisions, clear decisions, rapid decisions — that’s what you tell us you need and that’s on us to deliver.”

This change at the helm of the CMA coincided with news that the authority had overspent on its budget, resulting in the launch of a redundancy program that is expected to affect up to 10% of its workforce. However, the CMA has confirmed that the Digital Markets Unit (DMU) in charge of enforcing the new SMS regime introduced by the DMCCA will be ring-fenced, as well as the unit in charge of mergers, meaning cuts in other parts of the authority staff.

Both Doug Gurr and Sarah Cardell, the CMA’s current CEO, emphasised that the change in direction will not impact the core of the CMA’s work (i.e., antitrust, cartels and consumer protection). However, it cannot be excluded that the substantial reduction in the CMA’s workforce (outside the DMU and mergers), and the prioritisation of smarter and faster merger reviews, will affect the capacity of these other functions.

The Government’s “steer” to the CMA’s CEO

Pressure from the government to be less risk averse and more pragmatic has spurred the CMA to pledge to “drive growth and investment” and speed up its decisions. Sarah Cardell has stated that the regulator would judge mergers to make sure they “enhance business and investor confidence” whilst also ensuring to protect “effective competition for the benefit of UK businesses and consumers”. Jonathan Reynolds (Secretary of State for Business and Trade) has suggested the UK in fact has too many regulators and has called on the competition watchdog to be “more agile”.

The government’s draft “strategic steer” for the CMA further enhances the upheaval in the competition sphere.

The government sends a clear message, that is, the CMA’s approach must in fact reflect the need to enhance the UK as hotspot for international investment. The CMA’s approach must contribute to the “overriding national priority” of economic growth.

Additionally, this draft instructs the CMA to take into account the actions of other regulators…globally. The CMA, “where appropriate, [should] seek to ensure parallel regulatory action is timely, coherent and avoids duplication”.

Sarah Cardell has hence stated that, “[w]e have today set out a programme of rapid, meaningful changes to our mergers process, which will enhance business and investor confidence and enable us to continue protecting effective competition for the benefit of UK businesses and consumers.”

The CMA has said that it would complete a pre-notification phase on its investigations within 40 working days. This is a drastic reduction from the current 65 working days (approximately). Additionally, the CMA plans to reduce the timings for a “straightforward phase 1” investigation to 25 working days from 35 working days. Sarah Cardell stated, “[w]e know speed of decision making is vital to reduce uncertainty and costs for businesses”. This move also stems from comments made by Sir Keir Starmer who has stated previously that the government would “make sure that every regulator in this country, especially our economic and competition regulators, takes growth as seriously as this room does”.

There appears to be further changes in the near future. The CMA’s review of remedies will be starting in March 2025 and this brings about the chance for large changes. The review will include looking at an increased openness to behavioural remedies, the role of “relevant customer benefits” to offset anti-competitive effects and the scope for remedies to play a role in “locking-in” pro-competitive efficiencies (as already shown in the recent Vodafone/Three conditional approval decision).

Conclusion

The dust is still settling from the events of January and yet there may be more changes to come. It is unclear whether Doug Gurr will be confirmed as the permanent Chair (there still needs to be a process, of course). The 10% workforce reduction is likely to curtail activity outside merger control and digital market regulation. The drive towards growth could mean a more lenient approach to mergers, especially when it comes to considering behavioural remedies. Additionally, it remains unclear whether the CMA will open new SMS investigations beyond those already commenced against Apple and Google, although the provisional findings in the CMA cloud services market investigation indicate that the CMA is minded doing so.